Crisis in Hungary

The crisis of capitalism and the revolutionary perspective in Hungary

by Dr Thürmer Gyula, president, Hungarian Communist Workers’ Party

The forces of capitalism both in Europe and Hungary make enormous efforts to hide the fact that contemporary capitalism is in a deep crisis. They cannot deny the existence of serious problems of capitalism, but they try to demonstrate that all problems can be solved within the framework of capitalism by capitalist reforms.
But the truth is that the serious internal crisis of capitalism cannot be solved by traditional capitalist reforms. The revolutionary perspective of solving the problems of capitalism is becoming more and more real.
Hungary is one the weakest elements of contemporary European capitalism. Hungarian capitalism is in a deep crisis, independently of the worldwide crisis; but it is being made even deeper by the general crisis of capitalism. The crisis is far from being solved, and nobody can foresee its consequences.
Under these circumstances we should not only criticise the capitalist system but we should also demonstrate to the people the real possibility of establishing a new world. We should demonstrate socialism as a real alternative to existing capitalism.
It means that the communist movement in Hungary is entering a new situation, which means new possibilities and new tasks.

The crisis of Hungarian capitalism

Hungarian capitalism is in crisis, and the general crisis of international capitalism makes it even deeper. The crisis of contemporary Hungarian capitalism can be explained by the following factors:
1. The overwhelming majority of the Hungarian economy, industry, financial system, trade and services have been sold to foreign capital.
Hungary was the first ECE country to open its economy to foreign investors, in 1989. According to the statistics of the UN organisation UNCTAD, also dealing with foreign investments, at the end of 1990 foreign direct investment in Hungary accounted for 1.7 per cent of GDP. Today this ratio is over 70 per cent. In the EU this ratio is just 40.9 per cent, in Romania 36.7 per cent.
Almost 100 per cent of banks belong to international capital. 80 per cent of industrial production comes from transnational companies. The Hungarian economy depends much more on foreign capital than any other of the countries of Europe. After 2011 there is a real danger that Hungarian agricultural land could also be bought by foreign capital.
The decisive role of foreign capital is one of the characteristic features of Hungarian capitalism. Twenty years ago the capitalist counter-revolution was the result of the activity of international capitalism, the internal betrayal by the revisionist forces of the ruling communist party, and the activity of the bourgeois opposition.
There had not been a strong Hungarian capitalist class. The new capitalist class was created partly from elements of the former ruling elite of the socialist system, which used their political position to take an active part in the privatisation of state property, partly from intellectuals and entrepreneurs of the socialist period, partly from new generations that appeared on the scene during the last two decades.
The extraordinary large role of transnational capital is the result of different processes. Firstly, the capitalist forces were aware of the fact that the period of socialism was a successful period in Hungarian history, and the social forces of socialist society, the working class and the co-operative agricultural farmers, were quite strong.
The capitalist forces were interested in liquidating these social classes and groups. They saw only one way: to involve transnational capital. Secondly, the liberally minded intellectuals were always oriented to the United States, Israel, and the transnational capitalist forces, and they have always considered the large role of foreign capital as something absolutely normal.
All Hungarian governments have supported foreign investments by giving cash subsidies, determined by individual government decision, development tax allowances, training subsidies, job-creation subsidies, etc.
The Hungarian capitalist class consists of different groups. Firstly, a small but influential group of big capitalists has positions in the financial area, trade, and services. It is closely connected with transnational capital. Secondly, hundreds of thousands of micro, small and middle-sized entrepreneurs are engaged in industry and trade. Their position is very weak. They are under a double pressure from EU capital and Chinese capital. Without strong support from the state, they are sentenced to death.
These developments have serious consequences, now that the capitalist system is in crisis. Firstly, foreign capital controls the basic areas of the Hungarian economy. They have absolute power in the financial area and they control the most sensitive area: internal trade. Inasmuch as there is not any strong national production, there are very limited possibilities for defending Hungary by its own means. It can be clearly seen that transnational companies are trying to solve their own problems by reducing production and by closing plants in Hungary, which contributes to the rise of unemployment.
2. The gap between the wealthy and the poor groups of society has widened enormously. This is one more reason for the crisis of Hungarian capitalism. The original accumulation of capital meant that people have been deprived of their resources. It is the result of the inflation policy, tax policy and credit policy of capitalist governments of the last twenty years.
Hungary has a population of 10 million. Of these, 9 million can be considered as people living at a very limited standard of living or even under poor circumstances, and only 1 million can consider themselves as winners from the social changes, EU membership, etc.
As the following figures show, the number of the desperately poor—those living under the poverty line—has drastically increased over the past years. The poverty line is the sum of incomes of a household that allows those in the household to feed and clothe themselves and pay for heating and electricity. In 1993, according to reliable statistics, 27 per cent of Hungary’s population lived below the poverty line.
There were about 1 million poor people in Hungary in 1980. Today their number exceeds 2½ million. The richest tenth of society makes 7.3 times more money than the lowest tenth.
Perhaps children are in the most severe situation. Almost half the people under eighteen live in a family below the poverty line. In the past years, in 53 per cent of households real wages have decreased. This means that in those families the growth in incomes was slower than the growth in prices.
The number of so-called long-term poor is rising. The long-term poor in Hungary comprise several distinct social groups: the homeless, the rural population, particularly those living in micro-communities, the unemployed or those withdrawn from the labour market, households with more than three children, single-parent families, single elderly females, and the Roma (the so-called “gypsies”). A third of the long-term poor are Roma, even though this group is only approximately 5 per cent of the Hungarian population.
In the first months of 2009 the average monthly income in Hungary was €402. Manual workers receive €295, white-collar workers €511. The minimum wage is €250. One should take into consideration that consumer prices are practically on the EU level.
During the last twenty years the working class have lost their savings, which they built up during the socialist times. Now working people use their last reserves, and many of them have no more reserves at all. The same can be said about the intellectuals, teachers, and medical workers.
Most of the working class and the intellectuals have recently taken on large debts to buy an apartment, car or television or just to cover the costs of everyday living. These social groups cannot mobilise new resources in order to face the consequences of the present crisis.
3. The third reason and characteristic feature of the crisis of Hungarian capitalism is the extraordinarily high level of corruption.
Hungary ranks 39th out of 179 countries in Transparency International’s Corruption Perceptions Index for 2007. Despite anti-corruption laws, non-transparency leads to persistent rumours of corruption in government procurement.
The reasons for these phenomena are connected with Hungarian capitalism itself. Firstly, the privatisation of state property meant practically free robbery. Now the different political and economic circles fight for a greater share of EU money, state orders, and central investments.
Secondly, the system of laws is very confusing, which is beneficial for those in the black economy. Today about 30 per cent of GDP is produced in the black economy.
Thirdly, the present political and juridical system is a result of compromises concluded twenty years ago between different groups of the capitalist class. Many of its elements have already lost their vitality. As a result of this situation the capitalist state cannot fulfil some of its basic functions, including the work of the police, local administration, etc.

Possible ways of development

The future development of Hungarian capitalism depends on the development of international capitalism and the processes going on in the different social groups of Hungary.
1. The international capitalist forces do not want to lose Hungary.
Hungary was one of the first countries changing from socialism to capitalism, and it served as a demonstration of the correctness of US and German policy of peaceful counter-revolutions.
This is one reason. The second is that international capital has invested large amounts of money in Hungary. Now the debts of Hungary are equal to 97 per cent of Hungarian GDP. The international capitalist forces would like to get their money back. That is why they are ready to help. In 2009 Hungary received €20 billion as standby credit.
The IMF and the international capitalist forces want a more or less stable political situation in Hungary, the oppression of all possible anti-capitalist movements, but with “EU-conformant means.” The Obama government seems to understand better than the EU countries that the collapse of Hungarian capitalism could lead to a series of collapses in the region. They could not convince their EU partners yet to invest much more money in consolidating Hungarian capitalism.
The United States is quiet indifferent about which group of the capitalist class rules Hungary politically. It demands from any Hungarian government absolute fidelity to the United States and NATO and participation in NATO military missions. In internal policy the US government expects a consequent and demonstrative fight against anti-Semitism and communist forces.
The leading EU countries do not express special worry about the situation of Hungarian capitalism. According to their experience they are convinced that in a Hungary that is member of the EU and NATO there cannot be social revolutions, not even social uprisings of great measure.
The different political groups of the EU express their sympathy for different political parties in Hungary. It seems that now both Germany and France are not satisfied with the performance of the Hungarian Socialist Party and would not oppose a change of government.
2. The Hungarian capitalist class consists of different groups.
The Hungarian Socialist Party (MSzP) and the Alliance of Free Democrats (SzDSz) represents big capital closely connected with transnational capital. They are traditionally oriented economically and politically on the United States and Israel.
The coalition of the socialists and liberals has been an optimal solution for international capitalist forces for a long time. Hungary takes an active part in all US and NATO-inspired military actions, from Kosovo to Afghanistan. The majority of the Hungarian economy was privatised, first of all sold to foreign capital, during the governments of these parties between 1994 and 98 and since 2002. The government headed by the Hungarian Socialist Party has been able to split the trade unions fighting against the government and to guarantee “social peace.” The socialists were able to subordinate to the MSzP all left political and civil organisations, with the exception of the Hungarian Communist Workers’ Party.
The coalition of the socialists and the liberals has declared a fight against anti-Semitism and guaranteed excellent possibilities of development for those who belong to the Jewish community in Hungary. According to the statistics of different Jewish organisations, today between 50,000 and 200,000 Jews live in Hungary. The inter-marriage rate for Jews is about 60 per cent. The MSzP-SzDSz government makes great efforts, among others, to change the constitution and to declare that “Holocaust denial and public incitement of racial hatred” is a criminal offence. The government, which asserts that Hungary is the place in Europe where some of the worst neo-Nazi incidents took place in recent months, planned the reform in response to public outrage at recent provocations.
In spite of all these developments, the international capitalist forces are not satisfied with the actual performance of the socialist-liberal coalition. The neo-liberal economic policy led to a serious worsening of the people’s standard of living. Millions are unsatisfied and begin to express their anti-government and even anti-capitalist attitude in different forms. The worsening of living conditions has strengthened two tendencies in Hungary, anti-Semitism and anti-Roma actions.
Fidesz (the Hungarian Civic Union) represents much more the small and middle capitalists, although it does not deny big capital. It is more oriented on Germany and the EU generally. Fidesz, which had been originally a liberal party, is now a party that tries to unify all conservative, nationalist forces. It co-operates closely with the Christian Democratic People’s Party (KDNP).
Fidesz, during its rule in 1998–2002, basically fulfilled the expectations of international capital. Hungary took an active part in the war against Yugoslavia and the “process of democratisation” in Eastern Europe. The policy of the Fidesz government of supporting the desires of Hungarian minorities in Romania, Slovakia and other countries for national autonomy led to criticism from some EU countries. US political circles criticised Fidesz because, according to their estimation, its government did not fight enough against anti-Semitism. Fidesz, while supporting transnational capital, realised a lot of measures in order to support Hungarian capital, first of all middle capitalists.
Since 2002 Fidesz has demonstrated that it is the largest oppositional party and is able to influence the political processes in Hungary. It was the organiser of large anti-government demonstrations in 2005–06 and initiated a referendum on basic issues of the educational and health policy of the MSzP-SzDSz government. The congress of Fidesz declared that it is necessary to create a “new majority,” including not only the traditional allies of Fidesz but other political forces, trade unions and civil organisations, too.
At the same time Fidesz demonstrated that it does not want to exceed the frameworks of parliamentary democracy or violate the general rules of political behaviour in the EU. It did not support the large demonstrations of trade unions in 2007–09, although it meant great possibilities.
The idea of a new majority has not been realised, and Fidesz has not opened demonstratively towards other political parties.
The two groups of the capitalist class of Hungary represented by the basic political parties have common and different interests. All of them are interested in maintaining the capitalist system. They do not want to change the existing political system. That is why the 5 per cent limit for entering the parliament will be not changed. All groups of the capitalist class fight for a better position in privatisation, in getting EU money and large state investments. At the same time all of them know that their internal fight cannot threaten the common interest of the capitalist class. The Hungarian Socialist Party would like to keep power, and Fidesz would like to get it. Both of them understand that the EU allows using only parliamentary methods.
The MSzP uses different methods to keep power. Firstly, it is interested in the activity of the Movement for a Better Hungary (Jobbik). Jobbik are the storm-troopers of the capitalist class. They play a role similar to that played earlier by the Hungarian Justice and Life Party (MIÉP).
Jobbik fulfils different functions, using national feelings and radical anti-capitalist slogans they can manipulate the people. They are able to take votes from Fidesz. At the same time they use other “weapons” that are not used by other capitalist forces. These are anti-capitalism, anti-Semitism and anti-Roma slogans. They can take votes also from the communist forces. Jobbik registered the Magyar Gárda, the extremist paramilitary “Hungarian Guard Movement,” in June 2007 as a “cultural organisation” to “prepare the youth spiritually and physically for extraordinary situations when it might be necessary to mobilise the people.” According to a recent report by the Progressive Institute, today in Hungary there is a greater openness towards extremist movements, because of poverty and job losses resulting from the current economic crisis.
Secondly, the socialists try to get all left votes. They could not subordinate the Hungarian Communist Workers’ Party to the MSzP, but in 2006 they were able to create the “Hungarian Workers’ Party of 2006,” which is a revisionist party, in words criticising capitalism but supporting the socialist-liberal government.
Thirdly, they helped the birth of new organisations, such as the party called “There Can Be Another Policy,” which, together with the Humanist Party, can create an alternative to the liberals.
3. Under these circumstances there are two basic ways in which Hungarian society can go on: the way of capitalism and the way of socialist revolution.
From the point of view of the capitalist alternative, of decisive importance is the fact that the field of action of Hungarian capitalism is principally determined by the enormous influence of transnational capital in the Hungarian economy, by the political, military and ideological dependence of Hungary on the United States, NATO, and the EU.
Within capitalist development—we emphasise, inside capitalism and not as an alternative to it—different courses are possible. One of these is a further subordinating of Hungary to the IMF, EU, and other capitalist centres.
The Hungarian governments will serve the interests of transnational capital by liberalising fully all areas of the Hungarian market, liquidating the remainder of Hungarian enterprises, suppressing all forms of protest by the working classes. It is the way of giving up fully the national sovereignty of Hungary, the way of limitation and oppressing democratic rights.
This policy will continue if the socialists remain in power. They declare it clearly and demonstrate it in actual policy.
We have no illusions, and we cannot have any: this policy can be revived in some form even if Fidesz comes to power. Fidesz is also the party of big capital, just like the MSzP; the only difference between them is that in the social base of Fidesz are many more representatives of the small and middle bourgeoisie.
The Hungarian Communists should not and will not support this way. The Communists should know that the neo-liberal, pro-IMF way will worsen the conditions of the people, and can lead to a further radicalisation of the masses. The Communists should prepare for this situation. We should fight against such development which would lead to a radical right turn in policy. There is not a real danger that fascist or even radical right forces would come to power. The actual extremist right forces are not strong enough, and such a development would lead to an immediate intervention by the EU, as we could see in Austria some years ago.
But there is a real threat that the capitalist forces would use the crisis in Hungary and the strengthening of extremist right forces for establishing a “democratic dictatorship” in order to “save democracy.”
Within the capitalist way of development we can also imagine such a course, which provides more opportunities for national capital, for Hungarian small and middle enterprises. Nor can we rule out the possibility that, in order to avoid mass resentment and the outbreak of large-scale social conflicts, capital will make some concessions to the masses, will try to mitigate the social and economic problems of people.
In foreign policy also it can happen that Hungary will pursue a more balanced course while keeping its main commitment to the EU and NATO. For example, it will develop closer relations with Arab and Latin American countries. We can observe the development of similar alternatives within the capitalist system in a number of Latin American countries.
This way is possible under the circumstances of capitalism. The present government and the Hungarian Socialist Party are against it. The main opposition party, Fidesz, representing the interests of the Hungarian middle capitalists, expresses its readiness to limit transnational capital, to support Hungarian enterprisers, to limit the incomes of big capital, and to give more to the broad masses. It is a question whether Fidesz—on coming to power—would really do it or would look for a compromise with international capital.
This way does not meet completely the interests of the working class and means only provisional improvements. But this way means some improvements for the working masses. It allows the HCWP to co-operate with the small and middle bourgeoisie on the basis a of common fight against transnational capital, supermarkets, and foreign exploitation.
This course will be successful if we are able to turn popular resentment into an organised force and thus force capitalist governments to restrict capital. The Hungarian Communist Workers’ Party takes part in trade union fights, in the movement of “home defenders” (against evictions), in civil actions in order to increase the influence of Communists and to build the forces of mass resistance.
Lenin wrote in The Two Tactics of Social Democracy in the Democratic Revolution: “The proletariat must carry to completion the democratic revolution, by allying to itself the mass of the peasantry in order to crush by force the resistance of the autocracy and to paralyse the instability of the bourgeoisie. The proletariat must accomplish the socialist revolution by allying to itself the mass of the semi-proletarian elements of the population in order to crush by force the resistance of the bourgeoisie and to paralyse the instability of the peasantry and the petty bourgeoisie.”
Another way is the way of socialist revolution. It is clear that the basic problems of the working class can be solved only in the way of the socialist revolution by overcoming capitalism. The Hungarian Communists have always been in this position, but since the capitalist counter-revolution in 1989–90 we did not speak about the possibility of socialist revolution. Now we should do it!
“The current crisis is an expression of a deeper crisis intrinsic to the capitalist system, which demonstrates capitalism’s historical limits and the need for its revolutionary overthrow,” we can read in the common declaration of communist and workers’ parties in São Paolo.
Our parties have also declared: “Emphasising that neo-liberalism’s bankruptcy represents not only the failure of a policy of management of capitalism but the failure of capitalism itself, and confident of the superiority of the communist ideals and project, we affirm that the answer to the emancipatory aspirations of workers and peoples can only be found in the rupture with the power of big capital, with the imperialist blocs and alliances, and through deep transformations of a liberating and anti-monopolist character . . . Certain of the possibility of another world, a world that is free from class exploitation and the oppression of capital, we declare our commitment to continue the historical path to building a new society, socialism, free from class exploitation and oppression.”
The Hungarian Communist Workers’ Party will take the way of socialist revolution. Now we consider our basic and most important task to be demonstrating to the Hungarian people that capitalism is not the only way of living. We should demonstrate that capitalists will never give to us a better life, never will give us any place in the parliament. We should win these things by serious struggle. But this way is a realistic way, and we can create a new world: socialism.
Naturally, we remember the words of Lenin: “Every revolution means a sharp turn in the lives of a vast number of people. Unless the time is ripe for such a turn, no real revolution can take place.”
Now we cannot speak about a revolutionary situation in Hungary. But we can speak about the possibility that the general development of the crisis of international capitalism and its consequences in Hungary can lead to the birth of revolutionary situation.
We consider our main task to be preparing the Communist Party for such a situation. The historical experiments show that real revolutionary situations remain unused if the subjective circumstances do not exist at the due time.
We strengthen our Marxist-Leninist education. The members and activists of the party should understand the present situation and the real meaning of the revolutionary way.
We study the historical experience of socialist revolutions in Hungary with the aim of using those experiences that can be applied today.
We study the experience of the communist parties of Greece, Portugal, Brasil, Venezuela and other countries and how to organise and stir to greater activity the masses.
The party organises its leading bodies on a new basis. We are creating “local revolutionary centres, ” with the necessary mobile informational equipment.
We create mobile “combat groups,” which can participate in different demonstrations, street actions, and solidarity events.
We are building a new youth organisation, with young people deeply devoted to idea of revolution.
We began to go directly to the factories to meet the workers. The experiences are very positive.
We are opened to all anti-capitalist, anti-monopoly initiatives and participate in all social actions that fight against supermarkets, against neo-liberal housing policy, against ejections of those who cannot pay for gas and electricity.
We create a more effective system of alternative media, using the weekly paper A Szabadság [Freedom], the internet, and other means.
We are building up a broad system of the web pages of local organisations, using Youtube technology and other modern internet technologies.
We fight for the more effective co-operation of communist forces in the international arena.
The HCWP has left the Party of the European Left, because we do not agree with the revisionist and opportunist policy of the party.
We are convinced that we need not a “new European political culture” but a very consequent fight against capitalism, for the rights of the working masses. We should not only criticise capitalism but should organise the everyday fight of the workers. We want to liquidate capitalism; the Party of the European Left wants to make it better.
We are standing on the basis of Marxism-Leninism, the theory and practice of class struggle, the principles of proletarian internationalism. The European Left, unfortunately, is standing on the basis of reformism. The European Left fights against capitalism only in phrases, but in practice it helps to strengthen the “democratic” image of the European Union, the European Parliament, and the capitalist system generally.
Lenin said: “It is impossible to predict the time and progress of revolution. It is governed by its own more or less mysterious laws. But when it comes it moves irresistibly.” We should be prepared for it.